Maritime Housing and English Partnerships are to fund research into the use of tax credits to boost private investment in regeneration projects.
It is hoped the scheme will lead to an injection of private cash for projects that otherwise might have failed due to lack of funding.

The idea is that the Inland Revenue makes available a one-off credit against tax to a developer in a regeneration area.

The credit can either be claimed by the developer when it presents its tax return at the end of the financial year, or traded to convert the credit into cash that can be invested in the scheme. The latter option is already used in a similar scheme in the USA. The precise costs are unclear.

The decision to carry out research follows Maritime's announcement of the idea at last year's Urban Summit (HT 31 October, page 7). It has since been in talks with the Office of the Deputy Prime Minister about how best to take the idea forward.

Andrea Titterington, chief executive of Maritime Housing, said: "The ODPM is leading on this and the Inland Revenue has not yet been involved.

"We've so far had really positive responses from Halifax Bank of Scotland and interest from Nationwide. We have also been talking to the Liverpool housing market renewal pathfinder and they're on board and very keen to have a pilot study."

A spokeswoman for English Partnerships said: "We are not committed to the idea of tax credits, but we are interested in how it could support future housing projects, especially in the pathfinder areas."

The research is likely to look at setting up two pilots – one of which will be in Liverpool – and possibly extending the project to the Thames Gateway if the pilot work proves successful. The aim is to assess how the model would work in housing markets with different levels of demand.

However, primary legislation is likely to be required before tax credits could be used for regeneration schemes.

Source

Housing Today